QUALITY COUNTS

The first quarter’s leasing velocity was strong and will continue to be, we learned from CBRE’s Paul Myers, Matt Van Buren,and John Maher when we dropped by the firm’s new 200 Park Ave digs last Thursday for its quarterly research breakfast. Asking rents have moved up several dollars, concessions are retreating, and taking rents are ticking up. But we’re in a highly segmented market— performance of properties will be uneven, tenants still have plenty of opportunities, and both the landlord and tenants can still make deals in their favor. The key question for the tenant is where they fit into the market as it exists, John says. And higher-quality, better-located space in Midtown will dominate the performance metrics, adds Paul.
CBRE research guru Travis Yuengst, left, gives the media the grand tour of CBRE’s new offices, a 125k SF renewal and relocation within the building (the airy Gensler-designed space includes Sanborn NYC maps etched into the office’s glass surfaces). Certain spaces will overshadow leasing choices going forward: higher floors in quality buildings (only a 2.7% overall availability, with less that 1.1%in trophies); higher-end buildings overall (landlords are pushing asking rents significantly, with one Park Avenue Class-A jumping from $120/SF to $140/SF quarter-over-quarter); quality large blocks in Midtown, and smaller spaces in Class-B buildings. However, there are only nine blocks sized 250k SF and over, with 25 tenants on the prowl for that space, we learned. The softest market is the 10k to 25k SF range “where we can show you space until you drop,” they say.

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